tv Leaders with Lacqua Bloomberg December 27, 2017 9:30pm-10:00pm EST
♪ francine: founded more than a century ago from humble origins, l'oreal is now the biggest beauty products company. it hosts an international portfolio of 34 brands and has a euros.cap of 105 billion at the home, he has covered all facets of the business over four decades. today, we meet jean paul agon,
chairman and ceo of l'oreal. thank you. jean paul: pleasure. francine: innovation, your share price has grown, was it exciting? jean paul: very exciting. i started has ceo 10 years ago. in 2008-2009, but globally as this has been good. we have been growing, acquiring brands, launching new products, gaining market share, very exciting. francine: what has been the most fun? jean paul: the past 3-4 years. thanks to digital revolution, everything has been transformed. i think this industry, our business, our company has more chance in the past three years than the previous 30 years come at so an amazing time. francine: is it the way you sell
or the weight people look at makeup? jean paul: it is the relationships between brands and consumers. digital has completely transformed the relationship between the two. before that, brands were talking to consumers, pushing to them information or whatever am a but now the consumer has taken power. the consumer decides how he wants to see the brands, what he wants to know. digital creates a relationship. francine: isn't it difficult to control your brand? at the sameeah, but time more exciting and enriches the relationship. communicate we can the content of our brands, due tutorials, have a personalized relationship with
the consumers. it is a completely new time mentioned. it is much more rich and exciting. francine: what sells that the moment, luxury brands or consumer brands? > luxury hasthis year, been booming everywhere, mostly with chinese consumers. chinese consumers are fantastic. they love beauty, luxury, l , brands, and business has been booming. francine: l'oreal's reach stretches across 140 countries. two thirds of sales are generated outside europe. much attention has shifted to demand fore strong lipstick and perfume is driving growth. in 2015, china surpassed france to become the groups second-biggest market behind the united states. some of the success is
attributed to selfies, camera-conscious millennials buying makeup to look good. have you adapted to the chinese market? jean paul: not for all brands. the luxury brands are the same all over the world, but brands like l'oreal, maybelline, the products made in china formulated by chinese. francine: because of regulations? jean paul: not only. we want to create a product absolutely right for them, especially skincare, because there needs, skin aspirations, are different, specific. we formulate in chinese labs and manufacture in chinese factories, and l'oreal paris is the number one beauty brand in china. francine: one of the most popular products is a homemade range of cosmetics favored by
the wife of president xi jinping. jean paul: still the number one beauty brand in china, the preferred beauty brand by chinese women is l'oreal paris. it is great because l'oreal paris is the number one brand for chinese, americans, europeans, russians, everywhere. francine: not bad. tell me about your success in china. is it their distribution, adds, through celebrities? what is the attraction? jean paul: the reason for the success is the same, number one quality. our absoluterands priority is the quality and safety of our products, something the chinese respect a lot.
it is very important for them. number one, innovation. innovation is extremely important in an industry where you have to innovate a lot. our products are new in order to keep innovation flowing strongly. it is the imagery of the brands like giorgio armani and l'oreal ,aris, it is beautiful imagery and chinese consumers aren't sensitive to that. they like it. francine: is the u.s. a tough market? ,ean paul: it is a bit softer certainly softer than china, but it depends. last year, the u.s. was very good. market roughly globally is more or less growing at 4%, but never the same way. francine: how difficult is it what will work and what will
not? why am i using this mascara, this foundation, not the other? jean paul: when you know well your consumers, understand their desires, can guess their dreams or expectations, then you can create what they will love. francine: what will the next four years bring? is that a specific market that will grow more, men's cosmetics, or something else? the paul: digital will be most important element of transformation in the markets, so definitely e-commerce is growing. e-commerce in china is 30% of our sales for our mass-market brands, huge, so we will see digital growing. we will see new channels emerging like specialty stores, our own stores. , a growing big segment is travel retailing, the
stores in the airports, because more and more people are traveling, so there will be new channels. in terms of the regions, emerging markets are growing. makeup has been booming for 2-3 years. i think it will keep booming. too, so i amrowing optimistic about the possibilities of this industry. francine: what do you think you spend most of your innovation on? making lipstick that last longer? jean paul: and a few secrets. francine: but you can tell us. we are amongst friends. ♪ amongst friends. ♪
the application of the makeup on your face. you see your self with the lips covered with the lipstick you want, the shade you need, the powder, the mascaras. i did a demonstration to my board completely made up. francine: was that for the launch of the app? jean paul: yeah. francine: fantastic. jean paul: i wanted to share with the board the fantastic progress. it is amazing. red., pure i know i don't have any on. >> it is like amy winehouse. francine: this is amazing because you have to change your research and development. how much cost goes on digital products? say paul: difficult to because it is everywhere in every brand in every division, but now more in terms of media,
one third of media we do now goes on digital. 7% roughly of sales in e-commerce that we do for digital. it is growing 30% a year, so there is a shift happening, which is extremely fast and strong. thatine: the company invented the platinum blonde is constantly innovating and developing new products as consumer demand changes. in paris, scientists have studied 7000 types of hair and are experimenting with 3-d printing. the hope is to one day help people suffering from hair loss. has already created fake skin to avoid testing products on animals and invented a uv patch to monitor exposure to sun rays. threeaul: we are spending
point 5% of sales and research and innovation, and the most important our hair, skin. hair is where we invent and create new formulations for hair care, hair color, all types of hair products. francine: you also have a patch? jean paul: a uv patch. francine: you put it on to see when you are over exposed to the sun. made two yearsas ago and we presented it at a consumer show in vegas last year. it is a uv patch. you put it on your skin. it is linked to your cell phone. it rings when your exposure to uv is too high. it is a fantastic tool. francine: do think there will be more of a trend between cosmetics and health care? jean paul: absolutely. beauty,angle between health for the skin or hair, and
other things, this creates new opportunities that will be useful for consumers. francine: what to do like about your job the most? jean paul: understanding people. one of my strengths is the capacity of empathy with consumers. i have this capacity to understand, to feel, to guess what consumers want, what are their desires, sometimes their dreams, and then be able to formulate products that can respond to these dreams. francine: do you believe you have to take risks to innovate? do you? jean paul: of course. every innovation is a bet. every launches of that. film, music,new you never know in advance, but that is the magic of it. francine: what do you spend most of your innovation on?
lipstick that last longer? i know you have so many products. jean paul: and a few secrets. francine: and a few secrets, but you can tell us. we are amongst friends. many different departments are all working on all types of cosmetics, skin care, hair care, hair color, son care, because fundamentally we are the first and foremost in terms of efficacy and quality. the mission of the company is not only beautiful, but the best of beauty, the best quality, the best performance, the best efficacy, the best safety. that keeps us busy. francine: 3500 researchers. how long does it take from concept to the product being on the shelf for someone to buy? jean paul: it depends.
it can be quick when the formulation is easy. it can take may be six months, or when for example the marketing guy has as a vision, a dream, but the labs don't know how to formulate it. you can take two years, three years of it really depends. >> mega volume on top, mega volume on bottom. share it with your friends and by make up instantly. francine: one of the criticisms of the beauty industry is that it is only for young people. is there any truth to that? would be: no, it stupid. we are addressing all needs for look at ourome and ambassadors. , soexample, jane fonda obviously not. francine: do you sell more to millennials or those of a certain age?
jean paul: we sell to everyone. some of our brands like urban decay are targeting young people, biotherm or l'oreal paris may target other categories of consumers, but we cover the whole scope of consumers. in terms of age, in terms of diversity, in terms of countries , chinese, brazilian, europeans, everyone. it is beautiful. francine: how do you sell to the emerging markets? jean paul: we adapt the products we sell, of course. we make sure they are affordable and people can buy them. brazil is interesting. brazil is the country where the hair is completely unique. it is such a mixed country in terms of ethnic origins that the planned his completely amazing, and you have to create for
brazilians haircare products that are completely specific. by the way, it is very interesting because sometimes they are the most demanding you cans come so when create in brazil a product that is good for them come and then you can make it for the world. francine: do you think generation x cares more than millennials. jean paul: there is an urgency clearly. a are are not talking about potential threat. there is a clear and present threat. ♪ threat. ♪
products, a third of that on digital media. jean paul: when i was 20 years old, i was in business school and i knew i wanted to do marketing. for me beauty is the supreme art of marketing, because it is marketing that is not only about , but the motion, guessing, creation, so it is fantastic, marketing. there is no better marketing than beauty marketing. francine: from that 20 year old, what have you learned about yourself? jean paul: a lot. it was a long time ago. getook me maybe years to where i am today, but i was always passionate. i think the incredible part of l'oreal is that every day is a new adventure. every day is a passion. it is a company made of really
passionate people, and every new mission is an adventure. francine: what are you like as a leader, micromanaging or overview? jean paul: i'd like overview. from time to time, i'm tempted to do micromanagement, but when i do that, my chiefs say, jean paul, you should not bother with that. let us do it. francine: do you review the end product every time? all thel: i am with brands, not all the time of course. many, manyto countries around the world, and i am just trying to help to make sure that we are taking the pushing theions, understandingons, enough the consumers we are pilotg with, trying to the ship. sharing: l'oreal's
beauty with all program launched in 2013 was designed to transform business. was determined to make the company ethically and environmentally sustainable. it has been recognized for its efforts, awarded a aaa for water management, climate, and action against deforestation. francine: when did you start thinking about sustainability? ,ean paul: i long time ago especially when i came back from the usa and i took over as ceo. i really understood at the time for companies like l'oreal, especially because we are the leader of the beauty industry, we had to make sure that we do the best and the most to make the planet beautiful place. francine: what started it? much you say we sell so
that we have to make sure it does not go to waste? or is it consumers want something sustainable? for the employees you hire want something sustainable? jean paul: very good point. i think it is all of that. first, we have a moral duty. second, it is what employees are asking for. third, it is what consumers want. four , it is what society expects from a big company like us. francine: does it make a difference for the consumer? you told me a couple of years ago that if a consumer has a choice of one shampoo or the other, shoe always go for the shampoo that makes her hair better. jean paul: we want to make a shampoo that makes her hair better and sustainable. you're right. our vision is we have to find a way that is not opposite, that goes in the same direction. it is the same for performance. it should not be opposite to the
economic performance. we should be able to improve that. in the past 10 years, we reduced ,ur carbon emissions by 67% while at the same time increasing production by 30%. francine: how do you do that? jean paul: we work a lot. we transform all our factories. we have 10 sites that are carbon neutral. we completely transform the way we engineer with water you'd we have -- water. we have factories that don't use water at all. they recycle the water that they use. we in them an eight way's. -- eliminate wastes. so we transform completely the way we do business. francine: shareholders are behind you every step of the way for sustainability? jean paul: our shareholders are
proud of what we do. i cannot say that they are pushing us hard to do it, but they are happy and proud. francine: do think generation of cares more about this than millennials? jean paul: i think that everybody now cares. i think it is well understood ,hat there is an urgency clearly. we are not talking anymore about a potential threat. there is a clear and present threat to the planet, and if we are not all doing the maximum in the very short term, it is going to be very difficult, so i think every generation now understands that. francine: if i speak to you in five years, what will be your story? jean paul: in five years i will probably take it the most important mission has been the transmission, because i will not be ceo forever.
i will be, by the way, very glad to pass the baton to my successor. francine: do you think a lot about succession? what would you like your legacy to be? ton paul: i would be proud have been able to adapt l'oreal to the new world. i think we are living in a special period. will bed tomorrow different from the world of a few years ago, and my absolute priority is to adapt, transform, the company to make it as successful as a leader in the new world as it was before, and i am very confident about it because that is what we are doing. digitaloing a revolution, a sustainability revolution, so l'oreal will be a fantastic company. then someone else will take the baton and will drive the adventure further.
francine: jean paul agon, thank you so much. jean paul: thank you very much. ♪ retail. under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver.
rishaad: almost 12:00 here in hong kong, 10:00 in the evening in new york city. we're in the middle of the asian trading day. welcome to bloomberg markets. ♪ asian stocks starting with a new benchmark, little direction coming from wall street overnight. all signs of strength in japan, retail sales smashing expectations in november as consumers began to up their game.
taxing times in china. hedge funds may be the big losers in a new levy being imposed next week. a lot of predictions as to what will happen in 2018. this is on the bloomberg terminal. bloomberg, this is showing emerging-market currencies at three-year highs and currencies and white. we do have the dollar and the dollar index. what a showing is that since june, we've seen markets and somem the dollar saying it will be most beneficial for the em currencies. that trend is set to continue. that is currently the situation and the predictions for 2018 four emerging-market currencies. the trend is your friend. let's get the first word news